Federal Reserve Bank of Minneapolis President Gary Stern, playing down jitters in global money markets, said on Thursday that subprime mortgage problems were limited in scope and the Fed routinely injects substantial liquidity into the banking system.

Speaking to local business people in Billings, Stern said the problems with subprime loans were mainly focused in a small part of what is a vast market for U.S. home loans.

The problems are largely concentrated in the variable rate part of the subprime market. So if you put it into the context of scale, it's not that great, Stern said, adding that the sources of problems in that sector vary greatly, from borrowers being misled to over-inflation of home prices.

Stern declined to comment directly on the Fed's injection of $24 billion into the U.S. banking system on Thursday in a larger-than-usual daily operation, but said the Fed routinely pumps in substantial liquidity.

The important thing to know is that we add reserves to the banking system the vast majority of business days in substantial volume, he said. Most of our operations are simply designed to try to maintain the federal funds rate target just to make sure that supply and demand for reserves are roughly in balance.

Analysts have said the move by the Fed does not compare to an effort by the European Central Bank to prevent money markets from seizing up.

The Fed injected the funds as part of a regular daily operation aimed at bringing overnight interest rates back to target. Strong demand had caused the benchmark federal funds rate to spike to 5.5 percent, above the U.S. central bank's 5.25 percent target.

Earlier on Thursday, the ECB injected a record 94.8 billion euros ($130 billion) into euro-zone money markets in response to a spike in short-term interest rates after France's BNP Paribas froze 1.6 billion euros ($2.2 billion) in three of its funds.

Separately, the Bank of Canada released a statement saying it was ready to provide liquidity as needed.

Stern repeated remarks first made on Wednesday that U.S. inflation has been well contained since the late 1980s and the public understands the benefits of this achievement.

In a speech focused largely on the benefits of economic education, Stern made no reference to the current economy or the outlook for monetary policy.

Inflation has now been reasonably well contained for roughly two decades or so, and the consensus in favor of price stability has been sustained, he said, echoing comments made in Washington on Wednesday.

Stern is not a voter this year on the Federal Reserve's monetary policy-setting committee, which voted on Tuesday to hold official U.S. interest rates steady at 5.25 percent.

In the statement that accompanied that decision, the U.S. central bank acknowledged that financial markets had suffered recent turmoil and credit had tightened for some businesses and households.